The markets saw limited volatility due to inactivity in the US, leading to a resurgence in appetite for risk-linked assets. Despite this, expectations of a Fed rate cut in September continued to be strong.
On September 3, the US Dollar Index (DXY) saw a slight retreat but remained well above the 101.00 level. Key data releases for the day included the ISM Manufacturing PMI, final S&P Global Manufacturing PMI, Construction Spending, and the RCM/TIPP Economic Optimism Index.
EUR/USD reversed its recent downward trend and tested the 1.1080 level on the day. The ECB’s Jochnick, Nagel, and Buch were scheduled to speak on September 3, potentially impacting market sentiment.
GBP/USD followed the performance of other risk-related assets and bounced back from recent highs near 1.3100. The BRC Retail Sales Monitor was also on the agenda for the day.
USD/JPY climbed to two-week highs above 147.00 as the Yen depreciated further. The next key release on the Japanese docket was the final Jibun Bank Services PMI on September 4.
AUD/USD once again flirted with the key 0.6800 level in response to Dollar weakness. Australian Current Account figures were scheduled for release on September 3, offering further insight into the health of the economy.
Supply concerns from Libya supported a small recovery in WTI prices above $74.00 per barrel, following a significant pullback on Friday. Gold prices saw a slight decline below $2,500 per ounce, while silver prices dropped to three-week lows near $28.30 on the back of disappointing Chinese business activity data.
Overall, the markets saw some movement on September 3 following a period of low volatility in the US. Key data releases and speeches from central bank officials were in focus, influencing the performance of major currency pairs and commodities. Expectations of a Fed rate cut in September continued to drive market sentiment, with risk-linked assets seeing renewed interest from investors.
